About Pick of the Day

Every day, I will try to find what I believe is the best looking short term currency trade setup for the upcoming trading day or week. If you're a forex newbie, it can be tricky trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology behind price movements in the foreign exchange markets, so you can learn to analyze your own currency charts and trade on your very own. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

Since entering short at 1.5200 last week, Cable continued to make moves higher and eventually test the 61% Fibonacci retracement area, which is also a major psychological level of 1.5300. Fortunately for my position, that’s where the rally ended as forex traders turned bearish on Sterling, especially after today’s Bank of England’s inflation report hearings where BOE Governor Carney implies that interest rates in the U.K. will remain low `for some time.’ The British pound sold off strongly on the event, pushing GBP/USD to break the 1.5100 level and test the 1.5050 minor support area. With the market moving my way, I thought it would be time to create a “risk-free” trade, soI adjusted my stop to breakeven at 1.5200.

I’m pretty confident that the market will get down to my 1.5000 target, especially if US quarterly GDP data comes in better-than-expected, but I wanted to give the trade room to breathe. So I didn’t lock in profits by trailing my stop lower…Is that the right adjustment? I don’t know but it’s up to the market from here and I’ll just have to wait and see. Stay tuned!

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Risk sentiment drove price action for the most part during today's morning London session. However, Brexit-related news resulted in the pound getting pushed this way and that. The ECB's policy decision from yesterday, meanwhile, was still apparently weighing down on the euro. ...